Employment legislation and small businesses – the problem
We hear an increasing volume of complaints from small business owners that the implementation of the vast amount of legislation and statutory processes concerning the employment of workers is taking up more and more time. Furthermore, it is hugely complex and the consequences of an error, even an innocuous one, can have serious implications.
No one wants to go back to the bad old days where job security and employees’ rights were pipe dreams. However, the dominance of big business, NGOs and Corporates in the corridors of power means that the practical application of these laws, and the legal processes once they are initiated, are more aimed for those with the resources of large, specialist HR departments and the legal budgets to match.
The worrying ruling of Nolan vs Fairchild earlier this month, gives a case law that seems to suggest that the interactions between colleagues, employer and employee are to be micromanaged, the consequences of getting this wrong could result in an Employer losing a future Employment Tribunal. A misplaced comment, or angry remark when tired could trigger this. Read Professor David McGrogan’s detailed analysis of this here .
What was interesting about this case was the unspoken attitude of the Judges. There seems to be a blithe assumption that those who employ others are a combination of millionaire exploiter robber baron strawman and have access to vast resources and expertise to defend their corner. Yes, Employee Liability Insurance does provide some of the latter. But it doesn’t provide the cover for the impact of fighting a Tribunal on a very small business. The stress, the very public examination of your character, the time lost from the day job, the disruption in the workplace with other employees; none of this is covered.
We have already discussed that any decision to fight any Employment Tribunal should be carefully considered and professionals consulted. That, although it can gall every nerve in the body, occasionally settlement is the lesser of two evils. We have already recommended that it is a general rule, as it is in all business matters, to nip things in the bud long before they get anywhere near a court of any sort.
The problem is that ensuring you have all the ‘i’s dotted and ‘t’s crossed viz Employment Law and the Equality Act and others and ensured that all colleagues and managers understand their obligations, is a serious and taxing task for anyone, let alone someone who is just trying to run a guesthouse or local shop.
It is absurd that a tea room should have to contest an Employment Tribunal under the same terms as an NHS Trust, but that is where we are. Of course employees should have a recourse to justice but the method of that justice must be appropriate for the resources and size of the employer. Dragging Employers halfway across the country to contest a tribunal when the technology exists to do this over video is simply absurd.
There is a gap between how Employment Law is administrated and the actual employment market it is there to administer. As Napoleon said 200 years ago, we are still a ‘nation of shopkeepers’ most people work in SMEs – businesses under 250 people. Yet our machinery of Employment Justice is set up for large employers and the majority of those working within it have little or no experience of running a small business themselves.
Until this matter changes, SMEs will just have to muddle along. We can help with this. Get in touch for more information.
